I believe the theory of Darwinism is extremely relevant in the current global pandemic economy. Two quotes by Charles Darwin immediately come to mind:
- “In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.”
- “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”
We as humans and businesses have adapted and evolved to handle today’s uncertainty, as well as future crises. Businesses have had a major reset done to the way they operate, and I’ve observed many that have experienced a plateau in sales and growth.
When Roy Sailor, a partner at my company, and I discuss growth, we often talk about how it is affected by changing market conditions, market consolidation, regulatory changes or sales team performance. Breaking through a sales plateau is often accomplished through a change in leadership, a new or revised product design, increased marketing activity, or a new overall sales strategy. Because my company specializes in alliances and partnerships, I have seen firsthand that partnerships with companies outside of the organization are often overlooked when attempting to solve a challenging sales plateau.
In its CEO survey “Navigating the rising tide of uncertainty,” PwC found pessimism. Only 27% of CEOs surveyed said they were “very confident” in their prospects for revenue growth in 2020. I believe this finding captures the need for companies to focus on driving partnerships and alliances effectively in 2021.
Evaluating Your Current Partnerships
Developing partnerships can help identify new market segments, fill product capability gaps, open new sales channels, and even create entirely new business models. However, maintaining those partnerships and ensuring they still fulfill the needs of your business is just as important.
The following four questions can help you evaluate your partnership and alliances programs. This is a critical step in strategic partnerships. I’ve found that many leaders do not stop, pause and reflect on these questions; they are often too busy focusing on daily numbers, targets, revenue and the bottom line. Ask yourself:
- Does your new product design include developing capabilities that another company might have already perfected?
- Are there potential clients you are not calling on because they are too small or too large?
- Do you harness the power of your partner to more strategically win deals?
- Do you have a team that focuses on partnerships with accountability for increasing revenue and profitability?
Making Partnerships More Strategic
When partners work to collaborate in a strategic and responsible manner, alliances of many forms can thrive. Where do we start to look for making partnerships more strategic? Let us think about four different types of partnerships:
Vendor partnerships: A good place to start when trying to develop more strategic partnerships is assessing your existing vendor relationships. Do you have multiple vendors performing the same or similar services? Does it make sense to consolidate vendors? Does one vendor perform services better than the other vendors? Is there a vendor that might also purchase services from your company? Are vendors strategic or for financial benefits? Is your vendor incented to kill its own revenue and do what’s right for your business?
Companies rely on vendors for their success. Some are strategic to their existence, and some to drive cost synergies. As companies evolve and leadership and market realities change, it is important to relook at this channel and adjust to extract value and ensure that the objectives of getting into the vendor partnerships are still relevant.
Channel partnerships: Channel partners are companies that sell and service your product to customers you cannot reach. Could you use a channel partner to open new markets? Could a channel partner not only increase sales but also improve customer service?
This pandemic has stressed the need to get creative and look at all channels to continue to deliver goods and services to consumers. Taking a look at your channel partner program or building a new one can help ensure you are ready for the economy after the pandemic.
Solution partnerships: Integrating your solution with the product of another company can create new market opportunities for both companies. Is a combined solution better for customers? Could this combined solution open opportunities to sell downmarket or upmarket from where you sell today?
Once you have answered these questions, look for opportunities to extract maximum potential from solution partners. This is also a good time to look for advisors to get external market perspective and ensure you are solving a niche gap — and not just creating another mouse trap.
External partnerships: When two companies come together to leverage joint capabilities, markets and customers, a truly strategic partnership can be developed. Could you combine capabilities with other companies, maybe even competitors, to create a market differential that would produce material financial results for both companies? Is there another company in the market that has a capability your product is missing? Could that same company be interested in the capabilities your company offers today?
Now, look at your company mission and value statement, and reclassify your partnerships to align on common goals as needed. Or, you can consider bringing in a new partner to disrupt the comfort zone. Whatever step you take, ensure that the outcome enhances your consumer experience or solving a consumer problem.
Partnerships can be an effective tool to help improve sales results, expand market presence, deepen product capabilities, strengthen value for existing customers and open opportunities for new customers — all while also helping navigate through issues like this pandemic.
While there are many toolkits, frameworks and white papers out there talking about this subject, I believe the human experience, emotional intelligence, the alignment of vision and redefining the word “partnership” will decide future winners and survivors.
About the Author: Sohil Goorha is the CEO & Founder of stratitnow, ex VP from GE and Genpact and member of Forbes Business Council. Learn more here. You can also read this article on Forbes.